Hyundai Merchant denies receivership, shares rebound sharply

Park Sae-jin Reporter() | Posted : January 21, 2016, 12:02 | Updated : January 21, 2016, 12:02

[Aju News DB]

South Korea's troubled Hyundai Merchant Marine rebounded sharply Thursday after dismissing rumors that it may soon face a possible court receivership because of its weak financial condition.

Shares in the country’s second largest shipping company soared more than 25 % in early trade after the company assured investors that it would seek measures to improve its financial health.

A Hyundai Merchant spokesman said the company was considering various measures concerning its bulk shipping business, including a possible sale to help pay its debt.

Hyundai Merchant is considering the sale of its bulk shipping business to private equity firm Hahn & Company for about 600 billion won (496.86 million US dollars), the Korea Economic Daily reported, citing unnamed investment banking sources.

Hahn & Company will pay about 100 billion won in cash to HMM and take on about 500 billion won worth of debt, it said.

On the previous day, Hyundai Merchant plunged as much as 17 % on speculation that financial woes may force it to go into court receivership.

Hyundai Merchant is the largest shareholder of Hyundai Asan Corp, which operates a long suspended tour project for North Korea’s Mount Kumgang resort..

The shipping company posted a loss of 24 billion won in the third quarter, amid a protracted slump in shipping industry.

To improve its financial health, Hyundai Merchant has sold two of its three very large crude tankers, divested its LNG businesses and sold stakes in Hyundai Logistics and Hyundai Oilbank.

There has been media speculation about the merger of Hyundai Merchant and  the country’s biggest liner Hanjin Shipping, which is also in an equally bad shape financially. But the Ministry of Oceans and Fisheries  stressed that it’s important for the two companies to continue their independence for the sake of South Korean economy.

Alex Lee
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